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Virtual Economies: Design and Analysis (Information Policy), by Vili Lehdonvirta, Edward Castronova
PDF Ebook Virtual Economies: Design and Analysis (Information Policy), by Vili Lehdonvirta, Edward Castronova
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In the twenty-first-century digital world, virtual goods are sold for real money. Digital game players happily pay for avatars, power-ups, and other game items. But behind every virtual sale, there is a virtual economy, simple or complex. In this book, Vili Lehdonvirta and Edward Castronova introduce the basic concepts of economics into the game developer's and game designer's toolkits. Lehdonvirta and Castronova explain how the fundamentals of economics -- markets, institutions, and money -- can be used to create or analyze economies based on artificially scarce virtual goods. They focus on virtual economies in digital games, but also touch on serious digital currencies such as Bitcoin as well as virtual economies that emerge in social media around points, likes, and followers. The theoretical emphasis is on elementary microeconomic theory, with some discussion of behavioral economics, macroeconomics, sociology of consumption, and other social science theories relevant to economic behavior. Topics include the rational choice model of economic decision making; information goods versus virtual goods; supply, demand, and market equilibrium; monopoly power; setting prices; and externalities. The book will enable developers and designers to create and maintain successful virtual economies, introduce social scientists and policy makers to the power of virtual economies, and provide a useful guide to economic fundamentals for students in other disciplines.
- Sales Rank: #819571 in eBooks
- Published on: 2014-05-09
- Released on: 2014-05-09
- Format: Kindle eBook
Review
What happens when you cross the dismal science of economics with the joyful art of video game design? Lehdonvirta and Castronova offer a fascinating series of answers. This penetrating yet accessible book shows the value of economic thinking for designing virtual worlds, and the value of those virtual worlds for understanding ours.
(Kevin Werbach, The Wharton School, University of Pennsylvania; coauthor of For the Win: How Game Thinking Can Revolutionize Your Business)Online games and virtual worlds increasingly utilize sophisticated economies as part of their systems. This book provides an excellent and thorough introduction to how they operate and also how to build one in your own game. Using a wealth of examples from successful long running games like EVE Online, Habbo Hotel, and Everquest, Lehdonvirta and Castronova explain in clear and concise language how virtual economies are built and how to optimize them for success. They also manage to make economics interesting--I really wish this book had been available when I took economics in college.
(Mia Consalvo, Canada Research Chair in Games Studies & Design, Concordia University)Many professors and independent readers will choose to supplement this book's information with reading packets and online resources, but Virtual Economies could easily stand alone in any context. Highly recommended.
(Curtis Frye Technology and Society) About the Author
Vili Lehdonvirta is a Research Fellow at Oxford Internet Institute, University of Oxford. Edward Castronova is Professor of Communications and Professor of Cognitive Science at Indiana University. He is the author of Synthetic Worlds: The Business and Culture of Online Games and Exodus to the Virtual World: How Online Fun Is Changing Reality.
Most helpful customer reviews
3 of 3 people found the following review helpful.
This book is a great look at the theories behind economy design
By wheelz
This book is a great look at the theories behind economy design. If you are new to designing economic systems and need a good general overview this is great source material for gaining a valuable foundation. The main reason I didn't rate this book at 5 stars is because I was expecting a little more insight on the design side, where as the book focused much more on analysis side.
The book used a lot of good examples of game economies (such as EVE online and Habbo Hotel) to describe important concepts. It also spent a lot of time explaining the differences between efficient real-world economies and (intentionally) inefficient virtual ones. It contains a robust reference section and detailed footnotes about where to find more information if desired. One thing that bothered me about this were the few times when concepts were presented as important things to know, but then the authors immediately stated that they weren't going to cover them in 'this' book (e.g. Gini Coefficient).
Overall the concepts in this book were well presented and reading it provided a lot of good insights. This general knowledge sparked a lot of good ideas but disappointingly lacked any hands-on exercises for actually designing a virtual economy tying together the concepts in a neat package. It is up to the reader to infer the connections needed for the complex relationships needed when developing today's virtual economies.
I highly recommend reading this book, just don't expect it to leave you without any questions.
2 of 2 people found the following review helpful.
A fine, accessible core introduction.
By Harviainen Jussi T
In this volume, doctors Lehdonvirta and Castronova have not only produced an exemplary introduction to how one could and probably also should apply economics to game design. They have also written something that is very close to an optimal tool to teach the core concepts of economics to people maybe more familiar with minutiae of virtual worlds than the complexities of the physical world. In a serious, yet slightly playful and at all times instructive manner, the authors explain both the theories they are using and how those apply to virtual worlds and the real one, with sufficient variance to cater for different environments. The book draws both from Lehdonvirta's design experience and the authors' expertise in economics, economic sociology and so forth, making it highly useful for designers and scholars alike. That is no small task to accomplish, and the work passes that bar with flying colors. Reading tips throughout the way make it even more useful, by simultaneously grounding the arguments with existing frameworks and providing interested readers the next steps to follow at each major point.
This is a book that's of use to designers, researchers, and students, and one I'd immediately place on the reading list of any course teaching facets of understanding - or creating - virtual worlds.
2 of 2 people found the following review helpful.
An Excellent Overview of Economics for Game Designers
By Amazon Customer
Vili Lehdonvirta has been one of the leading economists working on virtual economies for a long time. From founding the Virtual Economy Reearch Network through his current position at Oxford, he's been at the forefront of virtual economic research.
But he was also a game programmer, a long time ago. And this book is his attempt to give something back to gaming: if a game is going to be "free to play" and depend on an in-game currency and economy to prosper, then game designers and developers need to know the foundations of micro-economics.
And that's what this book is: a book for game designers and developers, who know very little economics (outside, perhaps, of a few truisms like "prices should end in 9's" or "you should avoid hyperinflation") but know they need to know more.
And it's an excellent introduction to the subject.
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